The S&P 500 (SPX) dropped to as low as 2,612.67 on April 25, 2018 before bulls started buying the dip. This provoked a rally to 2,677.35 on April 27. Bears then flexed their muscles and drove the index down to 2,669.91 to end the week. Unless SPX can stay above 2,680 soon, it is in real danger of a breakdown below 2,600.

As the index continues to show weakness, let’s look at names flashing signs of strength.

HCA – Hospital Corporation of America

Hospital Corporation of America is an American company that owns and operates hospitals and related healthcare facilities. Founded in 1968, it now has 177 hospitals, 119 freestanding surgery centers, and 121 access centers in the United States and the United Kingdom. The company’s subsidiaries include Sarah Cannon Research Institute, London Bridge Hospital, West Florida Healthcare, Healthone Colorado, and St. Mark’s Hospital, among others.

Technical analysis show that HCA has taken out resistance of 90. This triggered the large cup and handle continuation pattern on the weekly chart. The breakout was validated by a surge in price and volume that catapulted the stock to as high as 106.84. Since then, the stock has been correcting to shed overbought readings. This could be a good chance for you to buy the dip.

Furthermore, fundamental analysis reveals that the trailing twelve months (TTM) price to earnings ratio (PE ratio) of HCA is 16.16. Based on the PE ratio, it could be argued that the stock is not expensive but it is not yet fairly priced. If you also consider that its five-year maximum PE ratio is 20.70, the figures suggest that HCA has some upside potential.

The strategy is to buy on dips as close to 90 as possible. If the market respects this level, it will most likely consolidate for some time before climbing to our target of 115. The process may take more than six months.

Weekly HCA Chart

Monthly HCA Chart

As of this writing, the Hospital Corporation of America (HCA) stock is trading at 96.25.

Summary of Strategy

Buy: Buy on dips as close to 90 as possible.

Target: 115

Stop: 86

HP – Helmerich & Payne Incorporated

Helmerich & Payne, Incorporated is an American petroleum contract drilling company founded in 1920. Operating on U.S. land, offshore, and internationally, the company contracts their drilling equipment to other oil and gas companies. They also engage in the research and development of rotary steerable technology, as well as own, develop, and operate commercial real estate.

Technical analysis show that HP is poised to take out resistance of 75. This would trigger the large double bottom reversal pattern on the weekly chart. To successfully breach the resistance, the stock must generate at least 5 million shares of HP on the daily chart. Those who bought the bottom are very likely to take profits at the resistance. The stock needs buyers to accommodate the increased selling pressure.

In addition, fundamental analysis reveal that HP’s trailing twelve months (TTM) PE ratio stands at 17.62. It may look like the stock is already fairly valued but it’s five-year maximum of 75.18 suggests that it has a lot of room to grow.

The strategy is to buy the breakout as long as HP prints the required volume. Once bulls complete the reversal, the stock will most likely create a base above 75 before crawling to our target of 115.

The process may take more than six months.

Daily HP Chart

Weekly HP Chart

As of this writing, the Helmerich & Payne Incorporated (HP) stock is trading 71.67.

Summary of Strategy

Buy: Breakout at 75 with volume of 5 million shares.

Target: 115

Stop: Close below 70.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.8 stars on average, based on 311 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance.
Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.

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AMD: Time to Find the Bottom

With the crypto hype nearly over, it’s time to see what’s happening with graphic board manufacturers. When demand boomed, their earnings burst, and so did the stock prices. Currently, however, the demand is down, and this is clearly seen in the earnings reports. While previously the earnings reached rather high numbers, they are bound to start shrinking now. What is important here is whether the management at such companies used the large capital inflows to take the companies’ performance to the next level.

Today, we’ll take a closer look at Advanced Micro Devices, known as AMD. We could also consider Nvidia (NASDAQ: NVDA), but its stock is seven times more expensive than AMD’s, which means it is much less available to the retail investors.

AMD earnings had risen by 2,200% when the crypto boom was at large, while Nvidia added 1,500% to its value. At the same time, when AMD shares were at the low, they cost around $1.50, which was quite alright for retail traders, while Nvidia shares were 15 times higher.

Advanced Micro Devices (NASDAQ: AMD) is a major GPU and chip set manufacturer. The company hasn’t had any production facilities of its own since 2009, and uses other companies’ facilities. Among AMD’s partners, one may mention Acer, Cisco, Dell, Ericsson, Fujitsu, HP, IBM, NEC, Nokia, Siemens, and Sony.

The major competition of AMD is Nvidia. In 2010, AMD was better than Nvidia, when its market share amounted to 51%. It was actually in 2010 when the first Bitcoin transaction was made. This was the jump start for the cryptos and, eventually, for mining devices.

By 2018, the crypto market cap reached its high at $840B, followed by the fall that has so far reached $119B. This caused a high demand for used GPUs, while the demand for new devices fell; this eventually led to the falling AMD sales. Investors booked their profits, and AMD shares fell, too. The earnings will continue going down, and the company will have to distract the investors from this.

The forecast for earnings in the coming quarter is not positive either, which means the stock has not reached its bottom yet.

AMD: What Happened Recently

In October, the Q3 report came in, with both the earnings and the ROI rising YoY. The operational profit went up to $150M, while the net profit rose by 70% to reach $102B. However, even with the earnings rising (mostly due to the CPU sales), the stock went down by 22% just because GPU sales shrank. When this happened, Deutsche Bank, Mizuho, and Morgan Stanley cut their forecasts regarding AMD share price.

In November, AMD partnered with Amazon to supply Epic CPUs for Amazon data centers. This pushed the price by 9% in the short term. Another price spike happened in December, when the 90-day ‘cease-fire’ was achieved in Sino-US trade wars; this was perceived as positive news for tech companies, and, in particular, pushed the AMD price by 7.50% upwards.

After that, the rise was over, and the shares were falling for 20 days in a row. The last hope was the Radeon IIV GPU release, which was presented at the CES expo on January 9, 2019. The stock started to recover but then went down abruptly.

This whipsaw may continue for long. What one may do is pay attention to the next quarter forecasts and do the tech analysis, while also watching the current and past events.

As such, some figures may show AMD’s strong points.

Thus, the equity ROI is 28.44%, with the overall industry number being at 11.84%; the profit margin is 5.05% versus 2.06%. On Dec 20, 2018, AMD was added into NASDAQ 100. Every year, the amount of data to process is increasing, while making the CPUs and GPUs smaller gets more and more difficult. This is likely to increase the demand, and, subsequently, increase AMD earnings, too.

On the dark side, AMD is not currently paying any dividends, while the P/E is 49.50 versus the 14.85 industry average, which means the company is well overpriced. The forecasts for the next quarter earnings are negative, which may put the AMD shares under pressure, too.

Thus, AMD shares may shrink in the short term, but in the longer term, they look quite attractive for investment. In order to understand where the price is going to ‘take off’, one should use tech analysis.

On W1, the price is above the 200-day SMA, which means there is an ascending trend. Fundamentally, however, the price may get lower, perhaps finding its support at the 200-day SMA.

The secondary support levels are at $10 and $15. $15, the nearest one, is very likely to get broken down, as it is quite far from the SMA. If the sellers get more active, the price may head further lower to reach and even break out $10. However, the odds are that the breakout will not continue for long, and a recovery will follow immediately. Thus, $10 may be considered a good level for taking long positions.

On D1, $22 is a currently strong level. In case it does not get broken out soon, it may become then a starting point for the price to start heading towards $10.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 23 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.

Stock Pick: Starbucks Corporation (SBUX)

Starbucks Corporation (SBUX) is one of the most popular coffee and tea companies in the world. The company founded in Seattle markets, roasts, and sells specialty coffees and teas to retail consumers. In addition to the Starbucks coffee chain, the company also owns and operates popular brands such as Seattle’s Best Coffee, Teavana, and Tazo. As of June 2018, Starbucks Corporation has a workforce of 277,000 employees and sales of $23.5 billion in fiscal 2018.

Technical Analysis of Starbucks Corporation (SBUX)

For over three years, the stock range traded between $47.40 and $61.40. While many stocks printed new all-time highs during this period, SBUX was stuck in sideways trading. This changed in November 2018 when the stock took out resistance of $61.40 with an above-average move. The price action ignited a rally to a new all-time high of $68.96.

While the stock has been pulling back since, something tells us that SBUX will likely generate a fresh ATH in the next few months.

Technical analysis shows that SBUX successfully flipped resistance of $61.40 into support. This happened early this month as the stock completed the retest of $61.40. The price action is bullish. It tells us that the market is ready to trend higher.

On top of that, we can see a golden cross between the 50 MA and the 100 MA on the weekly chart. The crossover sets up the ideal MA alignment where the 50 MA is on top of the 100 MA and the 100 MA is above the 200 MA. This setup indicates that the market’s uptrend remains healthy.

Fundamental Analysis of Starbucks Corporation (SBUX)

The most recent quarterly earnings report of the company beat expert estimates. Q4 earnings data reveal that SBUX posted an adjusted earnings per share of 62 cents versus expert estimate of 60 cents. It also surpassed expert projection of $6.27 billion in revenues as the company generated $6.3 billion. Lastly, the company printed global same-store sales of 3% as opposed to analysts prediction of 2.35%.

On top of the impressive Q4 earnings, the stock’s trailing twelve months price-to-earnings ratio (PE ratio TTM) stands at 26.27. It is still undervalued considering its five-year maximum is 39.60. This tells us that market participants are ready to pay a premium for SBUX shares. Along with the technical setup, it appears that SBUX has some upside potential.

The strategy is to buy on dips as close to $61.40 as possible. As long as bulls hold this level, SBUX will likely generate the momentum to rally to a new all-time high of $70.

The timeline for the target is less than six months.

Weekly SBUX Chart

Monthly SBUX Chart

As of this writing, the Starbucks Corporation stock (SBUX) is trading at $63.57.

Summary of Strategy

Buy: On dips as close to $61.40 as possible.

Target: $70

Stop: Close below $59.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. (0 votes, average: 0.00 out of 5)You need to be a registered member to rate this.Loading...

3.8 stars on average, based on 311 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance.
Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.

Stock Pick: Apple Inc. (AAPL)

Apple Incorporated (AAPL) is a company that needs no introduction, as it is one of the biggest and most valuable companies in the world. AAPL designs, builds, and markets media devices, computer software, as well as third-party digital content and apps. Some of the company’s popular products include the iPhone, iPad, and MacBook. As of June 6, 2018, Apple Inc. employs a workforce of 123,000 employees with sales of $247.5 billion in fiscal 2018.

Technical Analysis of Apple Inc (AAPL)

The last several months for AAPL have been nothing short of a disaster. The stock has been in a freefall after posting its all-time high of $233.47 in October 2018. Last week, the stock was down by as much as 10% on the weekly chart as it dropped to as low as $142.

It seems like almost everyone is bearish on the stock. This is exactly why we think that a bounce is in order and the technicals support our view.

Technical analysis shows that AAPL is ripe for a dead-cat bounce. It appears to be respecting the 200 moving average on the weekly chart. Last week’s candle has a long wick below its body indicating the rejection of lower prices. On top of that, AAPL is oversold on the weekly RSI. These signals tell us that the market is ripe for a relief rally.

Also, the 50 moving average on the monthly is acting as support. Throughout AAPL’s parabolic run, the market has always bounced hard after hitting this indicator. The stock’s recent price movement tells us to expect the same reaction.

Fundamental Analysis of Apple Inc (AAPL)

In addition to our technical analysis, fundamental analysis also backs our short-term bullish view. In other words, the stock remains bearish in the long-term but we can expect a relief rally for now.

Just a couple of days ago, Apple’s CEO Tim Cook issued a warning to investors to expect less than stellar numbers for the company’s fiscal 2019 first quarter. Instead of the projected revenue estimates of $93 billion, the company will likely post revenues of $84 billion. That’s a difference of 9.68%, which is huge if you’re one of the world’s top companies. On top of that, sales of the iPhone have been flatlining for years. This supports our view that the stock is bearish in the long-term.

However, it is interesting to note that the trailing twelve months price-to-earnings ratio (PE ratio TTM) is 12.48. The stock is undervalued considering that its five-year average is 15.25 while its five-year maximum is 20.70. These numbers tell us that the stock is likely oversold and trading below its actual intrinsic value. This is why we believe that a bounce should be on the horizon.

The strategy is to buy on dips as close to $142 as possible. As long as bulls hold this level, AAPL will likely generate the momentum to bounce to our target of $168.

The timeline for the target is less than three months.

Weekly AAPL Chart

Monthly AAPL Chart

As of this writing, the Apple Inc stock (AAPL) is trading at $148.26.

Summary of Strategy

Buy: On dips as close to $142 as possible.

Target: $168

Stop: Close below $137.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. (1 votes, average: 5.00 out of 5)You need to be a registered member to rate this.Loading...

3.8 stars on average, based on 311 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance.
Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.

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